January 13, 2011




Honorable Board of Directors
Golden Gate Bridge, Highway
  and Transportation District

Honorable Members:

A meeting of the Finance-Auditing Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, CA, on Thursday, January 13, 2011, at 10:40 a.m., Chair Stroeh presiding.

Committee Members Present (9): Chair Stroeh; Vice Chair Pahre; Directors Cochran, Eddie, Elsbernd, Grosboll, Moylan and Sobel; President Reilly (Ex Officio)
Committee Members Absent (0): None
Other Directors Present (4): Directors Boro, Sanders and Snyder; Second Vice President Newhouse Segal

Committee of the Whole Members Present (13): Directors Boro, Cochran, Elsbernd, Grosboll, Moylan, Pahre, Sanders, Snyder, Sobel and Stroeh; Second Vice President Newhouse Segal; First Vice President Eddie; President Reilly (Ex Officio)
Committee of the Whole Members Absent (4): Directors Brown, Campos, Chu and McGlashan

Staff Present: General Manager Denis Mulligan; District Engineer Ewa Bauer; Auditor-Controller Joseph Wire; District Secretary Janet Tarantino; Attorney David Miller; Attorney Madeline Chun; Deputy General Manager/Bridge Division Kary Witt; Deputy General Manager/Ferry Transit Division Jim Swindler; Deputy General Manager/Administration and Development Z. Wayne Johnson; Electronic Revenue Collection Program Manager David Dick; Public Affairs Director Mary Currie; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Lona Franklin

Visitors Present: Bridge Toll Officer Ben Ramirez

1. Discussion and Possible Action Relative to the Strategic Development Plan for All Electronic Toll Collection on the Golden Gate Bridge

Staff Report

In a memorandum to Committee, Electronic Revenue Collection Program Manager David Dick, Deputy General Manager/Bridge Division Kary Witt, Auditor-Controller Joseph Wire and General Manager Denis Mulligan reported on staff’s recommendation to authorize commencement of implementation activities for all electronic tolling (AET) on the Golden Gate Bridge (Bridge), including a budget increase for the AET project, meet and confer discussions with unions and filing of Notices of Exemption in the Counties of Marin and San Francisco.

The staff report stated that the Board of Directors (Board) of the Golden Gate Bridge, Highway and Transportation District (District), at its Special Meeting of October 30, 2009, approved the Financial Plan for Achieving Long-Term Financial Stability (Plan) to meet the District’s then projected deficit of $132 million. The Board, at its meeting of April 9, 2010, authorized preparation of a Strategic Development Plan (AET Strategic Plan) for Initiative #4, Implement All Electronic Tolling, to reduce the projected deficit, which now stands at approximately $89 million. A Sole Source Professional Services Agreement was authorized for Traffic Technologies, Inc. (TTI) to prepare the AET Strategic Plan.

The staff report provided a copy of the draft AET Strategic Plan and briefly summarized the main topics covered, as follows: (a) Benefits of AET; (b) AET Strategic Plan – Cost and Benefit Analysis Overview; (c) District Staff Impacts – Mitigation Overview; (d) AET Strategic Plan – Project Overview; (e) Scope; (f) Payment Options; (g) Schedule; and, (h) Next Steps.

The staff report stated that, with implementation of AET, operating cost savings of approximately $19.2 million are anticipated over the ten-year period corresponding to the Plan. The staff report further noted that the first two years of operational savings would offset the capital project cost of $3,237,000.00 and that net operational savings are expected to be $16 million. These savings are projected to begin in the fall of 2012 after anticipated cutover to AET and to accumulate over the eight-year timeframe remaining in the Plan.

The staff report stated that approximately 33% of toll payers pay the toll in cash. Fully automated toll collection must serve those customers, as well as others. New toll payment options and programs are to be developed, in concert with expanded availability of the FasTrak® program. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Mr. Mulligan reported that staff would provide a PowerPoint presentation regarding AET, including expected impacts to cash customers and District employees. He introduced Mr. Wire, who stated that today’s discussion of AET is planned to lead toward a capital project. He reported that District staff met together many times with staff from TTI in this collaborative effort, with the result being the draft AET Strategic Plan. He added that the Board is expected to take action on this proposal at its meeting of January 28, 2011.


PowerPoint Presentation

Mr. Dick stated that the following four topics would be addressed by the PowerPoint presentation: I. All Electronic Tolling Overview; II. AET on the Golden Gate Bridge; III. AET Staff Impacts; and, IV. AET Next Steps. He presented the PowerPoint, stating that availability of the FasTrak program will be expanded for cash customers, enabling them to maintain their account balance at retail locations currently in place, such as convenience stores that accept payment for cell phone or utility bills. Customers will be able to link a credit or debit card with their license plate for automatic license plate tolling. Other customers would be able to pay a toll invoice by mail, credit card or debit card, through a license plate tolling method. He added that the environment would benefit from AET because vehicles would no longer need to slow down or stop at the toll plaza, thus reducing emissions and traffic congestion. In addition, customers not using FasTrak® would not be required to have cash available. No personnel would be present in traffic lanes, which would increase safety, and southbound backups at the toll plaza would be dramatically reduced. Finally, operating costs would decrease due to the elimination of manual toll collection.

He provided examples of bridges and freeways around the nation and the world that have already adopted AET. He noted that the experience of these bridges and freeways leads to the notion that advance preparation is key. He reported that all the agencies that were interviewed stated that, given another opportunity, they would again opt in favor of AET.

He reported that the following Guiding Principles would direct decision-making for AET at the District: (a) maintenance of the existing $6 vehicle toll and $1 FasTrak discount; (b) encouragement to participate in FasTrak® for frequent customers; (c) accommodation of cash-dependent customers; (d) leveraging of existing hardware and software to reduce costs; and, (e) accommodation of infrequent customers. The proportion of customers paying the toll by the new license plate methods is projected to be approximately 26% by 2020. Toll payment by these customers would be facilitated by a comprehensive outreach and education program, letting them know about new and enhanced payment options. In addition, conversion to AET is predicted to reduce the total deficit by approximately $19.2 million over the period covered by the Plan, when compared to expected net revenue were the current toll collection method to be employed.

The PowerPoint provided a capital project timeline from approval of the AET Strategic Plan in April 2010 through implementation and monitoring of the fully converted system in November 2012. The AET Strategic Plan concluded that AET is a successful method of collecting tolls, that other agencies using this method are achieving their desired goals, that increased customer payment options will be available, and that cost savings will accrue to the District.

Mr. Johnson presented the “AET Staff Impacts” section of the PowerPoint, stating that, if AET conversion is approved by the Board, 34 jobs would be eliminated. However, prior to conversion to AET, the number of toll collectors will have been reduced by some level of attrition. Furthermore, the Board must authorize changes to the Table of Organization prior to taking action that would impact staff. Should the Board take the action necessary to revise the Table of Organization, the formal meet and confer process would be initiated, and an action plan for internal placement assistance or separation from District employment would be finalized. Policies detailed in Memoranda of Understanding (MOUs) and the Human Resources Guide would be followed.

Mr. Johnson pointed out that the current MOU covering toll collectors provides that the District give two weeks notice or two weeks pay in lieu of notice in the case of an impending lay-off. In addition, the MOU states:

“The District, in cases of reduction of forces, shall offer permanent employees who have completed their probationary period the opportunity to be utilized in other areas of employment with the District with no loss of pay.”

Mr. Johnson observed that the PowerPoint set forth the following list of 11 examples of enhanced preparation and support for employees affected by a reduction in force:

  • District positions posted internally for 5 days, prior to external posting;
  • Simplified recruitment process for qualified internal applicants;
  • Individual career goals assessment;
  • Individual training needs identified;
  • Interview training provided;
  • Departmental interview (simplified process);
  • Priority placement;
  • Priority for provisional and long-term temporary opportunities;
  • Prorated, 3 to 15 weeks of Severance Pay;
  • $2,000.00 to $4,000.00 of Tuition/Outplacement Services; and,
  • EAP, EDD, job sourcing, career guidance and other internal services.

In conclusion, the PowerPoint listed the following four “Next Steps”:

  • $2.9 million budget increase to the All Electronic Toll Collection capital project to commence implementation activities;
  • Meet and confer with unions who represent potentially affected employees;
  • Upcoming AET implementation policy and contract decisions, as follows:
    • Project advisor and technical support service contract(s);Business rule approval;
    • System enhancement vendor contract(s);
    • Vendor and consultant contract(s); and,
  • Anticipated elimination of cash toll collection in approximately September 2012.

Copies of the staff report, with attachments, and the PowerPoint presentation are available from the Office of the District Secretary and on the District’s web site.


Discussion by the Board

Discussion ensued, including the following comments and inquiries:

  • Director Grosboll made the following comments and inquiries:
    • He inquired as to how out-of-state violations would be handled. In response, Mr. Dick stated that out-of-state violators would receive a bill by mail, as would those from California.
    • He inquired with how many other states’ DMVs the District has relationships. In response, Mr. Dick stated that the District currently has relationships with 13 other states’ DMVs, which are the 13 most frequently seen out-of-state license plates. These are not necessarily geographically close to California, for example, North Dakota and Maine.
    • He inquired as to how delinquent bills would be handled. In response, Mr. Dick stated that the violation would escalate through the same steps whether in-state or out-of-state, and if the fine remained unpaid, would be turned over to a collection agency.
    • He commented that the District has had limited success in addressing people who do not wish to provide their addresses or other identifying information. Whether they would be willing to provide these to a retailer is unknown, and the District has not previously encouraged that. In response, Mr. Mulligan stated that it is currently possible to purchase a FasTrak® and remain anonymous. Staff recommends enhancing the network so a customer will be able to get a FasTrak® transponder without providing identification.
    • He commented that implementing AET will have significant environmental benefits and would likely reduce traffic. He stated that reducing environmental impacts and improving travel for people using the Bridge should be focal points of the change.
    • He inquired as to whether toll takers whose positions may be eliminated would be qualified for the new positions that would be created by the AET system. In response, Mr. Wire stated that several of the positions that are expected to be created would be highly technical information technology positions. He added that the skills set for toll takers is both broad and deep. A skills assessment is planned for the near future, should the Board approve implementation of AET.
    • He inquired as to whether, over the past five to six years, toll takers have successfully moved into other positions at the District. In response, Mr. Witt stated that he could recall three toll takers who accepted different positions with the District during the past five or six years. He stated that the most recent reduction in force resulted in only a single lay-off and that person was rehired within approximately six months when another individual retired.
    • He commented that toll takers are, in fact, the District’s ambassadors and not having them in the District’s employ would be a significant loss. He added that knowing only one individual was laid off during the last reduction in force is reassuring. Mr. Mulligan responded that, because fewer retirements are expected in the near future, one cannot conclude that the outcome would be similar.
    • He commented that additional specific information is needed by the Board as to how the District will handle customers who wish to pay cash.
  • Director Eddie made the following comments and inquiries:
    • He inquired as to whether the District would be required to pay a fee to a collection agency in order to use their services. In response, Mr. Dick stated that the collection agency would charge a fee on amounts collected, but no fee would be charged if the agency is unable to collect.
    • He inquired as to the length of time expected to elapse between the time an out-of-state customer incurs a charge to cross the Bridge and the time the District would receive the toll. In response, Mr. Dick stated that the customer would receive a bill approximately 15 days after crossing the Bridge. That bill would carry a due date and would be payable 30 days after generation. Should the bill become delinquent, a violation process would begin.
    • He commented that, although technology is available and reliable for predicting traffic drive times and for billing toll violators, the District must consider that it will be necessary to retain identifying information in order to facilitate successful billing for tolls. He added that a conflict could exist between the District’s maintenance of such records and the rights and desires of the public for privacy. In response, Mr. Dick stated that, while the District makes a photographic image for toll payment, it is not retained indefinitely.
    • He commented that he feels uncertain regarding his support of this new system of toll collection. He stated that toll takers have received 15- and 20-year service awards. In addition, although the District offers customers a $1.00 discount for using FasTrak® to pay tolls, this system will require the use of electronics without offering a discount. Postage will be an added cost for both the District and the customer. It appears that customers will receive few benefits from a change to AET, and the District will experience a long delay between the time a toll charge is incurred and the time the remittance is received.
  • Director Cochran made the following comments and inquiries:
    • He inquired as to whether all cameras to be used for AET would be located at the toll plaza. Mr. Dick responded affirmatively.
    • He inquired as to whether penalty amounts would be added to delinquent invoices. In response, Mr. Dick stated that penalty amounts of up to $70.00 could be added to an invoice prior to it being turned over to a collection agency.
    • He inquired as to whether retail vendors that handle FasTrak® transponder transactions and accept payments for invoiced tolls will charge a fee to do so. In response, Mr. Mulligan stated that no additional fee would be attached to the toll amount, although the vendors would charge a small fee for service, the cost of which would be lower than what the District pays for toll takers.
    • He inquired as to the maximum speed at which the cameras would be able to capture a license plate image. In response, Mr. Mulligan stated his understanding that the California Highway Patrol had tested the cameras on vehicles traveling at 99 miles per hour, and the images were clear. He added that the District currently takes a photo of a vehicle’s license plate if no toll is paid. Subsequently, the District contacts the owner for payment. He indicated that the technology to associate a license number with its owner’s name and address is cost effective.
    • He commented that many people wish to see a person inside the toll booth when they drive across the Bridge and stated his concern about eliminating that interaction. He noted that staff drew data from other AET users for the PowerPoint presentation, but only two of those were bridges. He stated that the Bridge is a unique, world-wide icon, and a hybrid of AET plus toll takers would be better. He observed that cash collections now equal approximately 33% of tolls collected, and speculated whether or not AET would collect more. He expressed his opinion that additional supporting data should be presented to assure the Board and the public that AET would be more economical in the long run.
  • Director Boro made the following comments and inquiries:
    • He inquired as to how the invoices would be transmitted to customers. In response, Mr. Dick stated that the first invoice would arrive within approximately two weeks of incurring the toll and, thereafter, invoices would arrive monthly. He added that the details have yet to be specifically defined.
    • He commented that Board members need additional information in order to make informed decisions in this regard. For example, many people are concerned about maintaining their privacy. These people may object to having their license plates photographed regularly and, for the same reason, may not wish to use a FasTrak® transponder. He added that the pace of change in society is swift and keeping problems and solutions in perspective is necessary. He requested that additional background information be provided on AET-related topics discussed by Board members.
    • He commented that, when the District considered use of FasTrak®, District staff contacted representatives from the State of New York, where FasTrak® was already in use. He added that making use of the experience of others is a good practice.
    • He commented that, prior to implementing FasTrak®, the Board created a committee with members from both staff and the Board. He noted the magnitude of this proposal is similar, and suggested that setting up a similar committee would be appropriate.
    • He commented that the District faces a large deficit with very little recourse other than raising tolls and fares. He stated that meetings with union leadership have been held, and that, if toll takers experience a reduction in force, the District will do all in its power to keep them employed by the District or help them locate employment outside the District. He added that, over the long run, the Board must make decisions that promote and preserve its mission. He suggested that additional information should be presented prior to a Board action, and that it would be appropriate for staff to seek input regarding financial projections and specific experiences with AET from other agencies that have already put AET in place.
  • Director Moylan made the following comments and inquiries:
    • He inquired as to whether the states with whom the District has relationships are in agreement with proposed collection methods, with the penalty proposed to be added prior to collection agency involvement, and with the use of collection agencies to recover delinquent payments. Mr. Dick responded affirmatively.
    • He commented that, if people wanted to pay their tolls electronically, they would already be doing so. He added that 33% of people who pay tolls do not like using FasTrak®. In addition, the District would have to lay off the people who are doing a good job, as they always have, and are the District’s good will ambassadors. The District needs good public relations now, as it always has.
    • He commented that, as an alternative to the instant proposal, the District should promote broader use of FasTrak®. He stated there is a cost associated with operating an AET program. He stated his desire to know all prospective costs before voting.
    • He commented that the human element is very important in this decision making process. He stated that he has been crossing the Bridge for approximately 59 years and that toll takers have always been the good will ambassadors for the District. He stated that, although he uses FasTrak® most of the time, he occasionally pays his toll in cash, so that he can talk with a toll taker. He compared District toll takers with those at other Bay Area bridges, stating that at this Bridge, people feel free to ask directions and they also get a smile in return. He speculated as to whether or not the District would save money through a change to AET.
  • Director Pahre made the following comments and inquiries:
    • She inquired as to whether a customer could purchase a hang tag to use for payment. In response, Mr. Mulligan stated that a customer would not need a hang tag in order to pay a toll. Hang tags are currently in use for online purchases for those who do not use a credit card. One would be able to purchase a hang tag, get a unique serial number, and provide the card and number to receive a FasTrak® transponder.
    • She inquired as to whether the other AET users had done their final roll-outs with or without trial runs. In response, Mr. Mulligan stated that Colorado conducted a soft roll-out, but other users did not do so, and received some comments from customers as a result.
    • She commented that additional information can be found through the International Bridge, Tunnel and Turnpike Association (IBTTA). Through the District’s membership in IBTTA, it has been learned that very few other transportation agencies collect tolls manually, as does the District.
  • President Reilly made the following comments and inquiries:
    • She inquired as to the use of retail outlets, and whether customers could go to the retail outlet and pay a toll invoice there; for example, if a customer crossed the Bridge and incurred the toll charge, could that customer go directly to one of the designated retail outlets to pay the bill immediately? In response, Mr. Dick stated that customers who have received a bill could go to the retail outlet and pay that bill. He added that further investigation is to be done into several methods of payment. Mr. Mulligan noted that 15% of all Bay Area residents do not have a bank account. One of the goals for payment of tolls using the AET system is to accommodate customers who do not have bank accounts by using the same methods for payment of tolls that they currently use to pay other bills. He added that people with regular bank accounts would not be expected to use this method very often.
    • She inquired as to how customers would be able to identify retail outlets where tolls could be paid. In response, Mr. Mulligan stated that a number of retail networks exist at this time. Individuals who regularly pay their bills in this manner know the locations of these retailers and this group makes up a large proportion of the population we wish to reach.
    • She inquired as to whether pre-payment would be an option for this method of payment. Mr. Mulligan responded affirmatively.
    • She inquired as to the plan for maintenance of the retained toll booths if AET is implemented, and whether staff has concerns about retention. In response, Mr. Mulligan stated that the District has existing infrastructure and cameras. Retaining the toll booths would be more economical than removing them, and would take advantage of the District’s positive features. He added that staff has not voiced any concerns in this regard.
    • She inquired as to whether the toll booths have historical significance. In response, Mr. Mulligan stated that staff verified historical data regarding Bridge resources when the Seismic Retrofit Project was done, and found that the toll plaza has been reconfigured several times.
    • She commented that she will support the proposal to implement AET, but recognizes that the Bridge is unique. She added that the role of toll takers as ambassadors is important, and reminded Board members that once a decision is made to go forward, the District would be unlikely to return to the present method of collecting tolls.
  • Second Vice President Newhouse Segal made the following comments and inquiries:
    • She inquired as to whether, if AET is implemented, a routine traffic stop could result in a collection effort if that driver has unpaid tolls. Mr. Mulligan responded negatively; he added, however, that the system is based upon DMV registration, and an overly delinquent driver’s vehicle registration could be affected.
    • She inquired as to how AET would benefit users. In response, Mr. Mulligan stated that immediate benefits would include less traffic congestion on the Bridge, lower vehicle emissions, safety and other benefits.
    • She inquired as to whether the expressways and bridges that have already implemented AET systems are as tourist-intensive as the Bridge. She commented that many people drive across the Bridge simply to experience the crossing. She suggested that possibly some jobs could be retained by offering a different experience, for example, a hybrid of AET and toll takers. In response, Mr. Witt stated that the Harbor Bridge in Sydney, Australia put AET into action in 2010, and it is a world icon. Tourist considerations are similar at the Harbor Bridge to what they are for the District, although the Harbor Bridge has more traffic. Mr. Mulligan added that AET works well with rental cars. He noted that 5% of all vehicles crossing the Bridge are rental vehicles, and have a built-in tracking system.
    • She commented that crossing the Bridge is an entertainment experience for people. Ease of collection for the District would not enhance the entertainment value, but interacting with toll takers could add to the experience.
  • Director Snyder inquired as to whether financial considerations are driving the effort to implement AET, and whether the cost of AET would be approximately the same as the cost to pay toll takers. In response, Mr. Mulligan stated that, during the first year, AET is expected to reduce costs by approximately 15% compared to toll taker salaries. Mr. Wire added that, over the ten-year period covered by the Plan, the cost of AET toll collection falls year by year, but the cost of manually collecting tolls increases.
  • Director Sanders inquired as to whether an opportunity for reinstatement of toll takers would be available so long as the toll plaza remains in place. In response, Mr. Mulligan stated that installing AET would not preclude returning to manual toll collection should the Board take such an action.
  • Director Sobel commented that making a decision to adopt AET would be easy were it not for the requirement that toll takers be laid off. He stated that this element causes him concern and, if action will be taken in favor of AET, then the assessment process for toll takers should begin as soon as possible to provide the largest amount of time for the adjustment to change. He noted that changing professions presents many challenges, and the goals and aspirations of the people involved should be known and met as possible. In response, Mr. Mulligan stated that the District is an organization of people who have met many challenges together. The goal will be to assist toll takers in preparing for their future. Staff is prepared to work with the unions and the employees. He added that, as a courtesy, Mr. Witt met with the toll takers union last week. The intention of the District is to be transparent.
  • Director Stroeh inquired as to the life of the system. In response, Mr. Mulligan stated that, by increasing capacity, the District would be able to use existing hardware.

Public Comment

Bridge Toll Officer Ben Ramirez spoke of his opposition to the implementation of AET at the District. He stated that the human factor is very important for the Bridge, in that the Bridge is a cultural icon known around the world. People come from everywhere to see the Bridge, and toll takers are the faces and voices representing the District to citizens of the world. He stated that other employees of the District are rarely seen or heard by the public, but toll takers are the representatives of the District who are seen by all. He stated his understanding that the District must be fiscally responsible and cut its deficit, but also that there are many ways to cut costs.

He reflected on past recommendations that have not come to fruition, such as a plan to double the size of the Bridge. Although that action was not taken, the Bridge remains the corridor from the North Bay to San Francisco and south. He stated that fewer people than in the past live in the North Bay while being employed in San Francisco, but that has not come about due to toll taker activities. Toll takers wish to make the Bridge operate more efficiently and effectively. Mr. Ramirez stated that, in the past, the Golden Gate Ferry was not adequate to support all the people wishing to cross the Bay to San Francisco. That has changed. In addition, in the past, the bus system was dying, but the District improved it.

He stated that there is value in the actions taken by toll takers other than collecting money. Toll takers are the eyes and ears of the District. They see how security systems work when employed on the Bridge. Often, toll takers are first to inform the Sergeant’s Office of problems about which the Sergeants may be unaware. He stated that toll takers often are first to receive information, such as when a person appears ready to jump from the Bridge, and they report it accurately to the Sergeants.

He noted that, in the past, pedestrians paid a fee to cross the Bridge, and suggested this could be done again. He also noted that a great deal of money was spent on implementing FasTrak®, although that system remains in research and development. He stated that no new system can provide the information that toll takers provide. He stated that the District has a responsibility to the community of San Francisco as well as to the community of toll takers. He pointed out that people from all over the world see toll takers representing the District. He concluded by stating that the District is not ready to become fully automatic, and that it would be the wrong decision. Additional study is required, and other ways to save and make money should be investigated before AET is adopted.


Continuance to January 27, 2011 Finance-Auditing Committee Meeting

Chair Stroeh announced that this item will be continued to the Finance-Auditing Committee Meeting of January 27, 2011 for further discussion and possible recommendation by the Committee.



All business having been concluded, the meeting was adjourned at 12:15 p.m.



Respectfully submitted,

s/ J. Dietrich Stroeh, Chair
Finance-Auditing Committee